Children's Attitudes towards Saving - UK - July 2018

“Despite parents’ commitment to save, a decade of low interest rates, regulatory interventions and limited developments in the market has reduced the appeal of child-specific products. The recent rate rise and digital innovations mean there are now plenty of opportunities for providers to shake things up and offer something different, both for parents and their children.”

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Table of contents

Overview

What you need to know

Products covered in this Report

Executive Summary

The market

Junior cash ISAs grow in volume but stocks and shares fall out of favour

Figure 1: Amounts subscribed to Junior ISAs and average subscription per account, 2012/13-2016/17

Households with two or more children still majority at 55%

Figure 2: Percentage of families with dependent children, by number of dependent children in the family, 1997, 2007 and 2017

The child population is projected to grow

Figure 3: Share of total population, by selected age group, 2018-33

First increase of interest rates in more than a decade while monetary policy schemes come to an end

Parents are less likely to describe their finances as healthy and less confident about financial prospects

British children spend an average of £25 a week by the time they reach 15

Figure 4: Children’s average weekly spend, by age, 2014/15-2016/17

Companies and Brands

Big brands have remained passive in a low-interest environment

Prepaid cards provide a safe alternative to monitor and control spending

Savings adspend more than doubles in 2017/18 while investment-related spend falls

The consumer

83% of parents are saving for their children

Figure 5: Proportion of parents who are saving for their children aged 10-15, by gender, March 2018

Banks and building societies are the top choice, but piggybanks still appealing

Figure 6: How parents save for their children, March 2018

Parents still not persuaded to transfer CTFs into Junior ISAs

Figure 7: Products held by parents saving for their children, March 2018

Parents are confident in their actions but reactive about education

Figure 8: Parents’ attitudes towards children’s savings, March 2018

63% of children say they save money themselves

Figure 9: Who children say is saving money for them, March 2018

Parents could be doing more money-related activities with their children

Figure 10: Child and parent saving activities, March 2018

Children need to be prompted to engage with savings

Figure 11: Children’s saving activities, March 2018

Two thirds of kids say they are in control of their money

Figure 12: Children’s attitudes towards saving, March 2018

What we think

Issues and Insights

The time is ripe for a turn in the tide

The facts

The implications

Parents are committed to saving but need support and want flexibility

The facts

The implications

Children’s attention needs to be captured, and early

The facts

The implications

The Market – What You Need to Know

Junior cash ISAs grow in volume but stocks and shares fall out of favour

NS&I Children’s Bonds are being phased out

Child population continues to grow

First base rate rise in more than a decade

Parents are less likely to describe their finances as healthy and less confident about financial prospects

Children’s Savings Products

Junior cash ISAs grow in volume but stocks and shares fall out of favour

Figure 13: Number of Junior ISAs, amounts subscribed and average subscription, 2012/13-2016/17